Discounted Cash Flow Statement

1886 Words8 Pages

The aim of this report is to investigate the issues associated with the company’s financial status based on the company’s bank statement and assessment of the monetary numbers, a Discounted Cash Flow (DCF) Statement will be deliberated. Given the evidential findings and the analysis of the company’s revenue and expenses over a period of two years, a discussion of investment strategies will be presented to increase future cash flow rates. Followed by recommendations supported by the assumptions assembled in the Discounted Cash Flow Statement.
INTRODUCTION

Studio Art Arch is an innovative architectural design company that specialise in residential building design, in addition operating within many sectors of the building industry. They employ …show more content…

Sustainable building is simply using the correct resources in smarter, more efficient ways so the company can build homes that are warmer, healthier, cheaper to run and are more suitable for the environment we live in and future generations (ITM Co-operative Limited, 2014). This is what Studio Art Arch prides themselves with creating facilities that are resource-efficient, site and community enhancing. This could come at a costlier expense compared to standard construction materials. An effective marketing strategy will help deliver and push forward the ideas of a sustainable home (Business Victoria, …show more content…

Studio Art Arch’s financial analysis provided the information of a positive Return on Investment (ROI), of 16.89 percent signifying that the company is generating a net profit. The total income from the assumptions made was $71,418.38 over a two-year period, corresponding to a total revenue balance of $35,709.19 per year.
Industrial bench marks for construction housing services state that a minimum small annual turnover is ranging from $60,000.00 to $99,138.00 (Inland Revenue, 2016). From the numbers provided we can see Studio Art Arch is below the specifications for annual profit turnover for this sector of business. For a business to succeed in the long term it must generate an influential profit, therefore the net profit margin ratio is one of the foundation performance indicators for your business.
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